Sunday, February 23, 2020

Oil discoveries: will Guyana close up to the wealthiest countries on the planet?

Recent ample oil finds in Guyana aliment hopes that the south american country could fill in for declining Venezuela.
Observers whisper that international oil corporations pulled the guyanes president over the barrel at negotiations, also the previously poor and corrupt country might be overchallenged with the sudden prosperity writes german newspaper "Welt":

"Because Guyana has been an oil exporter for four weeks. Although the oil is still flowing sparingly, production is to be expanded rapidly within a very short time. The country then becomes an important player in the global oil market, and a poor, largely jungle-covered area can quickly become the richest nation on earth.
According to forecasts by the International Monetary Fund (IMF), economic growth is expected to reach over 85 percent this year alone. But whether and to what extent all of this benefits the population remains to be seen.
Guyana is located in the north of the South American continent, framed by Venezuela, Brazil and Suriname. It is about the size of Belarus, but only 775,000 people live there.
It was a British colony until 1966, after which Guyana only made the international headlines once: through the Jonestown massacre in 1978, when cult leader Jim Jones ordered his supporters, who had settled in the rainforest of Guyana, to commit suicide , This cost 900 people their lives, the pictures of corpses in the middle of the jungle went around the world.
Otherwise, life in the country has been going at a leisurely pace over the past decades. Mining - bauxite, manganese, gold - only benefited a small upper class, making Guyana one of the poorest countries on the continent.
By contrast, neighboring Venezuela has been at the forefront of prosperity in South America for decades, not least because of the almost inexhaustible oil reserves. But even though countless explorations were carried out in Guyana, there were simply no major oil fields there. Until 2015.
At that time, Exxon Mobil announced that it had found a huge oil field in the Starbroek Block, some 190 kilometers off the coast of Guyana. And after four years of preparation in a consortium with the US group Hess and the Chinese CNOOC, the black gold was pumped to the surface for the first time on December 20.
“Euphoric, Guyana's President David Granger promptly declared December 20 to be the new national holiday. Oil production gives the country the prospect of a better life, he said and promised: "Every Guyan will benefit from the oil production, nobody will be left behind." The oil field that is now being developed is to deliver 120,000 barrels a day by the end of the year, by 2025 it will According to forecasts by the International Monetary Fund, funding will rise to 424,000 barrels, other estimates assume up to 750,000 barrels or even one million barrels.
That would be more than neighboring Venezuela is currently funding. Production there has declined dramatically in recent years, which Guyana could now at least partially compensate for.
Another figure, however, is much more impressive and important for Guyana, namely oil production per capita. Because 750,000 barrels per day would correspond to around one barrel of oil per inhabitant that would be taken from the Starbroek block.
That would be far ahead of all other oil producing countries, even Kuwait only has 0.8 barrels per capita, Qatar 0.7 and Saudi Arabia 0.3. And that's not all: Exxon Mobil has now announced further oil discoveries off the coast of Guyana.
Almost overnight, the small, sleepy country in the South American rainforest thus became an oil nation, and the petrodollars patter on it from then on. The IMF therefore sees the economy growing by around 85 percent this year alone. By 2024, the country's economic power is expected to almost quadruple from around $ 4 billion a year to $ 15 billion a year.
Per capita income would then rise from just over $ 5,000, which is roughly the same level as Albania, to almost $ 20,000 - just a little behind Saudi Arabia. And a few years later, Guyana could compete with the rich Emirates in the Gulf.
But the big question is what people really get out of this new wealth. In any case, far too little, says the international non-governmental organization Global Witness, which takes action against human rights violations and environmental pollution in connection with the extraction of raw materials. She accuses Exxon Mobil of ripping off the inexperienced government of Guyana."

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